Roth deferrals deducted by CPA on Sole Prop tax return

[Tom]

We learned that a CPA was deducting a sole proprietor's deferrals on his 1040 for some years when we were record keeping it as Roth as the client intended.  We will see if the client wants to amend 3 years but obviously the plan recordkeeping must be fixed since this information has come to light.  It goes back a number of years further than the 3-year amendment period. It is a brokerage account not a recordkeeping platform so we reclassify in our admin system.  The client seems to be blaming us and is saying how he lost all this Roth opportunity.  Our questions - did you look at the reports we provide you each year?  Did you ever mention Roth to your CPA?  The CPA just stuck the 415 max on his 1040.

I will recommend Roth conversion for a couple years which will reinstate him back to where he wants to be for the most part.  And I will recommend adding a DB plan to offset the income.  He's a perfect candidate.   He mid 50's, makes $900,000+ and just has 4 younger eligible employees.  He's complaining about lost opportunity because he's says he's in 41% tax bracket now and when retired will be 20%.  He's got this backward!   I estimate that in 15 years his RMD might be $100,000 so if he pays 20% in retirement but saves 41% now - what is the problem.

My approach will be - the tax deduction for years has saved you tremendous amount of taxes. And when distributed you will pay tax at a much lower rate than what you saved up front.  I know some will say - what about tax-free earnings on Roth.  I did an analysis years ago which showed that if the tax rate is the same front end and back end and if tax savings are invested and earn the same rate as the plan, there is no difference between Roth and Regular in total payouts over retirement years.  I know it will be tough to get the client to understand this. 

There was a good article by Larry Starr in the early Roth years.  I will try to find that.  He made good points as to why Roth isn't all its cracked up to be.  Does anyone know of any good published piece questioning the value of Roth for some.  I realize for some it is a good option - low income, those starting out in careers.  And I realize funding as Roth most often results in better retirement readiness because most don't save and invest the tax savings when funding as regular. 

Thank you for any comments.  

Tom